Mail Stop 7010
October 13, 2005
via U.S. mail and Facsimile
Yuri Itkis
Chief Executive Officer
FortuNet, Inc.
2950 South Highland Drive, Suite C
Las Vegas, Nevada 89109
Re: FortuNet, Inc.
Form S-1 filed September 16, 2005
File No. 333-128391
Dear Mr. Itkis:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may raise additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form S-1 filed September 16, 2005
General
1. Please file all exhibits with your next amendment, or as soon
as
possible. Understand that we will need adequate time to review
these
materials before accelerating effectiveness.
Description of Graphics Inside the Front Cover
2. Supplementally provide us with copies of any artwork you intend
to
include in the prospectus.
Prospectus Summary, page 1
3. Clarify whether the gaming platforms you currently provide to
your
customers contain only bingo or whether the platforms contain
traditional casino games but are only available in stationary
devices.
4. Please discuss whether the gaming licenses that you currently
hold
allow you to manufacture and distribute mobile and wireless gaming
devices that conduct or control traditional casino games or
whether
you will be required to obtain additional licenses to do so. In
this
regard, it appears that the gaming devices and platforms you
manufacture and distribute currently only provide players the
ability
to play bingo. Make similar revisions throughout the prospectus
as
necessary.
5. Revise this section, and elsewhere as appropriate, to disclose
the
status of the regulations expected to be promulgated under the
Nevada
Mobile Gaming Law. State, if true, that unless and until
regulations
are promulgated under this law, you will not be able to distribute
mobile or wireless gaming devices or platforms containing
traditional
casino games.
The Offering, page 2
OpenIPO, page 2
6. Please revise to provide a brief description of the OpenIPO
procedures. For example, provide a bulleted list of the phases of
the auction process.
7. Disclose that the clearing price, and therefore the actual
offering price, could be higher or lower than the price range
estimated for the initial public offering.
Risk Factors, page 5
8. Throughout this section, you state that you "cannot assure",
"there can be no assurance", or you "cannot be sure [of]" various
facts. The real risk, however, is not your inability to assure
the
reader or predict the outcome of various situations. Please
revise
so that the risk is clear.
9. Many of your risk factor headings merely state a fact without
specifying the resulting risk. Review each risk factor caption
and
revise them as necessary to clearly specify the risk.
10. Some of your risk factors are lengthy and could be revised
into
several separate risk factors. For example, on page five under
the
risk factor heading "We are strictly regulated...", it appears
that
this risk factor could be separated into risk factors relating to
the
risks to the company, such as:
* the risk to the company if necessary approvals are not obtained,
* the risk to the company relating to continuous scrutiny by
Nevada
regulatory authorities,
* the risk of failing to maintain your licenses,
* the risk that you may not obtain regulatory approval for both
your
company and the gaming platform in certain jurisdictions, and
* the risk resulting from being subject to tribal laws and
regulations.
Review and revise your risk factors as appropriate.
The Nevada Gaming Commission may not adopt regulations..., page 6
11. Revise this risk factor to disclose whether a time frame has
been
established for the Nevada Gaming Commission to adopt regulations.
State whether the Gaming Commission has begun the process of
adopting
regulations.
Our electronic bingo product operations..., page 7
12. Revise to state the percentage of total revenues you derive
from
your contracts leasing electronic bingo products to casinos and
bingo
halls. In addition, disclose the percentage of your contracts
that
are electronic bingo product leases.
13. Please reconcile your statements in this risk factor regarding
your revenues with your statements regarding your revenues in risk
factors on page eight and ten. In particular, we note the
following
statements:
* "We currently derive substantially all of our revenues and cash
flow from our portfolio of contracts to lease electronic bingo
products to casinos and bingo halls."
* "Most of our revenue is currently derived through the
distribution
of our bingo products through independent distributors."
* "We currently derive substantially all of our revenues by
leasing
our wireless gaming terminals and associated equipment to our
gaming
establishment customers."
Revise your risk factors, as well as the rest of your prospectus,
to
clearly illustrate your business model and how your business
generates revenues.
If we fail to remedy certain significant deficiencies..., page 13
14. Revise this risk factor to include a cross-reference to a more
detailed discussion of the significant deficiencies found by your
auditors, including a statement as to when the deficiencies were
found, any steps you have taken or will take to remediate the
problems, and the anticipated time frame for curing the
deficiencies.
Acts of terrorism, as well as other factors affecting
discretionary
consumer spending..., page 15
15. Please revise this risk factor to clarify the specific risk to
your business. For example, state whether the reduction in visits
to
Nevada gaming establishments seen after September 11, 2001 is
ongoing. State whether your customers are able to discontinue
their
contracts with you upon an act of terrorism and a downturn in
consumer spending.
We operate our business in regions subject to natural
disasters...,
page 15
16. We note that you anticipate a loss of revenues and assets as a
result of the hurricanes that recently hit the Gulf Coast area.
State whether your leases allow your customers to discontinue
payments due to natural disasters. In addition, update this risk
factor to quantify the extent of the damage to your physical
assets.
If are not yet capable of determining the extent of the damage,
state
when you anticipate knowing and whether you have insurance to
cover
any of the losses sustained.
The closing of this offering is conditioned upon our receipt...,
page
19
17. State whether you have applied to the Nevada Gaming Commission
to
become a registered company and for the necessary exemptions.
Disclose the risk involved if you do not receive an exemption from
the mandatory licensing requirement imposed upon beneficial
holders
of your voting securities.
Use of Proceeds, page 23
18. We note your statements that you intend to use the proceeds
from
this offering to execute your growth strategy and expand
inventory,
although you do not have specific plans for the use of the net
proceeds. We also note that you may use the proceeds to acquire
businesses. Please be advised that if a material amount of the
proceeds are to be used to acquire assets other than in the
ordinary
course of business, the assets and the costs associated with the
purchase should be described. See Instruction 5 to Item 504 of
Regulation S-K. If the proceeds are to be used to finance an
acquisition, you should include the information required by
Instruction 6 to Item 504 of Regulation S-K. In addition, you may
reserve the right to change the use of proceeds; however, this
reservation must be due to contingencies that are disclosed
specifically, and the alternative uses of proceeds following these
contingencies are indicated. See Instruction 7 to Item 504 of
Regulation S-K, and revise your disclosure accordingly.
Capitalization, page 24
19. Discuss the anticipate stock split in reasonable detail,
stating
the reasons for conducting the split.
20. Please include your notes payable in your capitalization table
to
determine your total capitalization
Management`s Discussion and Analysis, page 27
Company Overview, page 27
21. Revise this section to clarify the products or platforms you
currently sell or distribute and the products or platforms you
intend
to sell or distribute upon the promulgation of regulations by the
Nevada Gaming Commission regarding mobile and wireless gaming
systems. Clarify your discussions throughout the prospectus. For
example, state whether you currently sell or distribute stationary
gaming devices for playing bingo, traditional casino games, or
both,
as well as mobile or wireless devices for bingo, traditional
casino
games, or both. Based upon your discussions in the "Business"
section on page 38, it appears that you currently offer bingo
products only and plan to introduce mobile gaming units with
traditional casino games such as keno and poker once the Gaming
Commission promulgates regulations.
22. Discuss your company and its structure in more detail. We
note
the discussion on page 28 regarding the acquisition of the
outstanding stock of Millennium and the statement on page one that
Millennium Games is FortuNet`s wholly-owned subsidiary. State
whether FortuNet has its own operations or whether it is a holding
company conducting business through Millennium Games. Revise to
discuss Millennium`s business operations in greater detail. In
this
regard, we note the discussion of the nature of the business in
footnote 1 of the financial statements as of June 30, 2005.
Results of Operations, page 30
23. With regard to changes in revenue period to period, separately
quantify the impact related to changes in your customer base
versus
the changes in your overall installed base of your systems at
customer locations. In this regard, we note your
disclosure on page 34 which indicates that increases in your
overall
installed base increases revenues without substantially increasing
costs.
24. You indicate in your discussion of cost of revenue for the
years
ended December 31, 2004 and December 31, 2003 that a significant
increase of deployed product into the market was offset by a
significant reduction in installation and upgrade expenses.
Expand
your disclosures to quantify the amounts related to each of these
factors. Clarify whether this increase and decrease in expenses
is
expected to continue. Clarify why there was a significant
reduction
in installation and upgrade expenses.
25. You refer to upgrade expenses. Clarify the nature of these
costs, including whether you are required, pursuant to your rental
agreements, to provide upgrades to your customers. If so, address
whether these upgrades impact your revenue recognition.
Liquidity and Capital Resources, page 34
26. Your analysis of your liquidity and capital resources,
particularly your cash flow analysis, should not be recitation of
changes and other information evident to readers from your
financial
statements, but rather should provide your readers with
information
that will allow them to assess your prospects for the future.
Please
expand this section in your filing to address the items discussed
in
Section IV. Liquidity and Capital Resources of Release No. 33-
8350
"Interpretation - Commission Guidance Regarding Management`s
Discussion and Analysis of Financial Condition and Results of
Operations."
Contractual Obligations table, page 36
27. Please include your long-term debt obligations in your
contractual obligations table. Refer to Item 303(5) of Regulation
S-
K.
Business, page 38
The Bingo Market and the Trend Towards Electronic Bingo Platforms,
page 39
28. Tell us whether the 2005 Casino and Gaming Market Research
Handbook is publicly available or if you paid for the market
research
to be performed for your company.
Customers, page 46
29. Within this section of your Management Discussion and
Analysis,
please include the disclosure of the percentage of sales to
significant customers as you have done on page F-10.
Research and Development, page 46
30. Disclose the estimated amount spent on research and
development
activities in each of the last three fiscal years. See Item
101(c)(xi) of Regulation S-K.
Sales, Marketing and Distribution, page 46
31. Disclose whether you enter into contracts with your
distributors
and discuss the average length of such contracts.
Securities Regulation, page 49
32. Update this section as appropriate with regard to the status
of
your registration and exemptions applied for from the Nevada
Gaming
Commission.
Individual Licensing Requirements, page 49
33. State whether you have filed applications with the Nevada
gaming
authorities for the licensing of your officers and directors.
34. State whether licensing and suitability determinations are a
precondition to becoming an officer or director.
35. We note that the Nevada gaming authorities may disapprove of a
change in a corporate condition. Please include a risk factor
discussing the implications to the company of any such
disapproval.
Requirements for Beneficial Securities Holders, page 50
36. It appears you are seeking an exemption from the licensing
requirements for beneficial holders. Disclose whether this
exemption
will apply only to current beneficial owners or whether it will
apply
to future beneficial owners as well. Clarify whether an exemption
from the licensing requirements will also have the effect of
exempting a beneficial owner from a suitability determination.
37. Revise to disclose whether you have submitted an application
for
a suitability determination of your officers.
Approval of Public Offerings and Approval of Changes in Control,
page
52
38. We note your disclosures in these sections regarding the need
to
obtain approval from the Nevada Gaming Commission prior to making
a
public offering of your securities or entering into certain
transactions resulting in a change of control. Please revise the
risk factor section to include a risk factor regarding the
possible
risk to the company and shareholders if you are unable to obtain
such
approvals or a significant delay in obtaining approval occurs.
Fees and Taxes, page 53
39. Disclose the approximate amount of licensing fees and taxes
you
pay annually.
Management, page 56
Executive Officers, Significant Employees, and Directors, page 56
40. It appears that Messrs. Coronel and Jacques do not yet hold
the
positions stated in the table and that they will hold the
positions
upon the completion of the offering and licensing by Nevada gaming
authorities. Please revise this section to state their job
positions
currently and update the information as appropriate. State when
you
anticipate Messrs. Coronel and Jacques becoming licensed.
Board of Directors, page 57
41. Please update this section as you name additional directors.
We
note that at this time you have one director, Boris Itkis, but
that
you anticipate having three directors, one of which is
independent,
at the completion of this offering. Include any consents of
persons
about to become directors that are required by Rule 438 of
Regulation
C.
Agreements with Executive Officers and Key Personnel, page 58
42. We note that Mr. Coronel is not required to devote his full
business time to the company. Please disclose the amount of time
per
week that he devotes to FortuNet.
2005 Stock Incentive Plan, page 59
43. Please provide a discussion of the issuance of phantom stock
under the incentive plan.
Certain Relationships and Related Transactions, page 63
44. If material, you should file the business loan agreement
entered
into between FortuNet and BankWest. Please tell us whether this
loan
agreement is the same as the unsecured bank line of credit
discussed
in footnote four of the notes to the financial statements as of
June
30, 2005. If so, please revise to state that fact and disclose
that
the line of credit expired in July 2005 and that you have applied
to
renew it. If the bank line of credit is different than the
business
loan agreement, please discuss the line of credit and the status
of
the application for extension of the line of credit. We note that
the line of credit is secured by the majority shareholder of
FortuNet.
45. Disclose the amount of monthly payments you are obligated to
pay
to Spiegel Partners LLC and discuss the advisory services provided
to
you by Spiegel.
46. It appears that you must pay $350,000 to Spiegel Partners LLC
upon the completion of this offering for advisory services. Tell
us
whether you intend to use the proceeds of this offering for that
purpose.
47. We note that you are obligated to pay $500,000 worth of shares
at
the IPO price to Spiegel as consideration for continued advisory
services. Revise to disclose the approximate amount of shares
that
will be issued to Spiegel. In this regard, we note statements
throughout the prospectus regarding the issuance of 41,667 shares
to
Spiegel. Revise to clarify, if true, that upon six months of
continued services, the shares issued to Spiegel can be registered
for resale. Clarify whether you will owe additional amounts to
Spiegel once it renders the future advisory services.
Description of Capital Stock, page 63
48. Disclose the amount of dividends paid to shareholders in the
two
most recent years and interim period. See Item 201(c) of
Regulation
S-K.
Shares Eligible for Future Sale, page 65
49. Discuss the circumstances under which the lock-up agreement
would
be extended up to an additional 30 days after the expiration of
the
original 180 days. If the circumstances referred to relate to the
issuance of an earnings release or public announcement of material
news as described in the Plan of Distribution section on page 74,
you
may provide a cross-reference to that information.
50. We note the statement that 41,667 shares will be eligible for
sale under Rule 701. It appears that these shares are to be
issued
to Spiegel upon completion of this offering. Please confirm our
understanding. Rule 701 is available to an issuer that is not
subject to the reporting requirements of section 13 or 15(d) of
the
Exchange Act for offers and sales of securities under a written
compensatory plan or compensation contract. See Rule 701(b) and
(c)
of the Securities Act. Additionally, in order for this section to
be
available to consultants or advisors, the requirements of section
(c)(1) of Rule 701 must be met. Please provide us with a detailed
analysis of why you believe the shares to be issued to Spiegel
Partners LLC qualify for an exemption pursuant to the rule and
therefore will be able to be resold under Rule 701(g).
Plan of Distribution, page 67
51. We note that WR Hambrecht + Co, LLC intends to conduct the
offering using its "OpenIPO"(r) auction process. Please indicate
in
your response letter whether the materials and procedures to be
used
in the offering and described in the Plan of Distribution section
of
your Form S-1 previously have been cleared by the Office of Chief
Counsel for the Division of Corporation Finance and whether the
materials and procedures have changed since receiving clearance
from
the Staff. If you cannot represent to us that these materials and
procedures have been cleared by the Staff, or if WR Hambrecht has
made any changes to its online offering websites or procedures,
please identify any changes that it has made. In addition, please
provide us with all the OpenIPO(r) auction process materials,
including screen shots and the text of any communications the
underwriter(s) propose to use in the electronic distribution. We
may
have additional comments upon review of those materials.
52. Please confirm that the information on WR Hambrecht`s website
is
limited to the electronic prospectus and other information
permitted
by Rule 134. Please provide a similar confirmation with respect
to
any dealers or selling group members that include such information
on
their websites.
53. Please give us sufficient time to review your underwriting
agreement prior to requesting effectiveness. We may have
additional
comments upon review of the agreement.
The OpenIPO Auction Process, page 68
54. Please amend this section to include a fair and accurate
description, or screen shots, of the internet web pages the
investors
participating in the auction will see prior to the auction.
Closing of the Auction and Pricing, page 69
55. We note that bidders who submitted successful bids will be
obligated to purchase shares allocated to them regardless of
whether
they are aware that the registration statement has been declared
effective or notices of acceptance have been sent. Please revise
to
clarify that the bidders will be obligated to purchase the shares
in
these circumstances only if the notice of effectiveness and the
notice of acceptance have, in fact, been sent.
56. Please clarify the circumstances under which the underwriter
may
cancel or reject a valid bid. In this regard, we note the
statement
on page 70 that the underwriter will not cancel or reject a valid
bid
after notices of acceptance have been sent.
The Closing of the Auction and Allocation of Shares, page 73
57. Update the first paragraph of this section to include the
appropriate number of shares to be sold in this offering, both
with
and without the exercise of the over-allotment option.
58. Supplementally tell us the process and procedures the
underwriter
will use to evaluate and consent to the sale of shares by dealers
outside of the auction process. Tell us how such sales outside of
the auction process would comply with our position regarding the
conducting of auctions. In the event that the underwriter
consents
to sales outside of the auction process by participating dealers,
the
prospectus should be amended to fully describe the procedures to
be
used by the dealers.
59. Please describe the "exceptional circumstances" under which
you
would alter the method of allocation discussed in order to ensure
a
fair and orderly distribution. Please confirm to us that in the
event the method of allocation is modified, you will file a
prospectus supplement or post-effective amendment as appropriate.
60. Explain what you mean by the statement that "no shares sold in
this offering will be allocated on a preferential basis or outside
of
the allocation rules to any institutional or retail bidders." In
this regard, we note the statement on page 70 that you may lower
the
price of the shares to include certain institutional investors and
retail bidders.
61. Please include a discussion of when successful bidders must
have
sufficient funds in their brokerage accounts to cover the purchase
of
the common shares allocated to them.
Report of Independent Registered Public Accounting Firm, page F-2
62. We note that your independent registered public accountant is
licensed in the state of Minnesota while your principal operations
are in the state of Nevada. Confirm to us that Schechter Dokken
Kanter Andrews & Selcer Ltd is in compliance with the Nevada state
licensing requirements. In the event of noncompliance with Nevada
state requirements, you should consider the need for additional
disclosure or obtaining audit services from a different
practitioner.
Balance Sheet and Statements of Stockholders` Equity, pages F-3
and
F-5
63. It appears that the company had undistributed earnings on the
date its S corporation election terminated. In accordance with
SAB
Topic 4B, such earnings must be included in the financial
statements
as additional paid in capital
as this assumes a constructive distribution to the owners followed
by
a contribution to the capital of the company.
Notes to Combined and Consolidated Financial Statements
64. Please revise your headings to include the years ended
December
31, 2003 and 2004.
1. Significant Accounting Policies, page F-7
Property and equipment, page F-8
65. We note your depreciation policy that you use accelerated
methods
for your property and equipment except for rental assets in which
the
straight line is used. Further, we note your risk factor
disclosures
on page nine that you operate in a highly competitive industry and
that the tastes and preferences of players of bingo and
traditional
casino games are known to change over time. In consideration of
these risk factors, please expand your Critical Accounting
Policies
to address why you have not chosen to use an accelerated method
for
the depreciation of your rental assets, but have chosen an
accelerated method for your other property and equipment.
66. Also, in consideration of the risk factors mentioned above,
please expand your Critical Accounting Policies to address whether
you maintain a reserve for your rental assets that are on hand,
but
are not expected to be currently used.
67. Disclose the nature of the accelerated methods of depreciation
related to your property and equipment.
Revenue Recognition
68. Your stated policy indicates that the Company recognizes
revenues
as the devices are used in accordance with the each lease
agreement.
Revise to clarify what you mean by this statement. Specifically
address how you determine the appropriate period and amount of
rental
revenue for rentals based on usage as well as for rentals based on
the percentage of revenue that the device generates for the
lessee.
Refer to paragraph 19 of SFAS 13.
69. You indicate in your critical accounting policy section on
page
28 that you recognize revenue when "play or availability of our
gaming platform" exists. Please revise your disclosure to clarify
what you mean by this.
70. We note your disclosure under the section Customer Support on
page 47 that you provide comprehensive support services to all
your
customers. Tell us whether
your customer support represents a separate deliverable as
contemplated by EITF 00-21. Provide us with sufficient evidence
to
support your conclusions.
71. We note your disclosure on page 27 that you typically install
your electronic bingo systems at no charge to your customers and
that
you capitalize all direct costs. Please include a discussion in
your
significant accounting policies that discloses the typical costs
that
are capitalized, the period over which you capitalize these costs,
and the basis for when you recognize these expenses. Refer to
paragraph 19c of SFAS 13. In this regard, we note your discussion
under expenses that installation costs and initial shipment costs
associated with new customer lease contracts are expensed as cost
of
revenue in the period in which the equipment is deployed.
Research and Development
72. You indicate on page 31 and 34 that your research and
development
costs may change significantly from quarter to quarter depending
on
whether you purchase new test and hardware and software
development
tools. Expand your disclosure to indicate your accounting for
these
tools. Ensure your policy addresses the notion of alternative
future
uses. We assume that since you appear to be expensing these costs
as
incurred these tools do not have alternative future uses as
contemplated in paragraph 11a of SFAS 2.
Production Costs
73. You indicate on page 34 that your production costs may change
significantly depending on the purchase of major manufacturing
tools,
such as plastic molding tools. Expand your disclosure to indicate
your accounting for major manufacturing tools. Address why these
costs are not capitalized to property, plant and equipment.
Commissions
74. We note that commissions paid are a material component of your
sales and marketing expense. Please disclose your accounting
policy
related to this material expense.
75. In light of your disclosures on page 47 which indicate that
all
of your leased products are warranted by you and maintained at no
extra cost to the customer, please provide the warranty
disclosures
require by paragraph 14 of FIN 45.
3. Other Assets, page F-10
76. We note your disclosure, "Other assets also include a signing
bonus the Company paid in accordance with the terms of a five year
lease agreement to lease gaming devices to a customer." Please
expand your disclosure to explain why you were required to pay
this
bonus and address the appropriateness of deferring this cost.
Disclose the period over which you will amortize this deferred
cost.
Income taxes, page F-12
77. We note your breakout of domestic and international revenues
on
page 47. Please expand your disclosures to address why your
income
tax provision does not contain a provision for foreign income tax.
11. Acquisition of minority interests, page F-15
78. We note your disclosure that you allocated the excess of the
estimated fair values attributable to the interests in net assets
acquired over the purchase price to reduce the cost values
assigned
to non-current assets. Please expand your disclosure to address
how
you determined the appropriate amount by which to reduce your
property, plant and equipment and non-compete agreement. In this
regard, we note that paragraph 44 of SFAS No. 141 requires a pro
rata
allocation to the amounts that otherwise would have been assigned.
13. Proforma net income per share, page F-16
79. We note you intend to effect an 83,500-to-1 common stock split
prior to completing the proposed IPO. As such, please revise your
historical financial statements to reflect the stock split. Refer
to
SAB Topic 4C.
Closing Comments
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
? should the Commission or the staff, acting pursuant to
delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
? the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
? the company may not assert staff comments and the declaration
of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Ryan Rohn, Staff Accountant, at (202) 551-
3739
or, in his absence, Jeanne Baker, Assistant Chief Accountant, at
(202) 551-3691 if you have questions regarding comments on the
financial statements and related matters. Please contact Tamara
Brightwell, Staff Attorney, at (202) 551-3751 or me at (202) 551-
3760
with any other questions.
Sincerely,
Pamela A. Long
Assistant Director
cc: Thomas J. Morgan, Esq.
Scott D. DeWald, Esq.
Quentin D. Vaughan, Esq.
Lewis and Roca LLP
40 North Central Avenue
Phoenix, Arizona 85004-4429
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Yuri Itkis
FortuNet, Inc.
October 13, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE